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NM merchants ask Santa for holiday shopping boost

Jason Gibbs, Las Cruces Sun News
Published 1:25 p.m. MT Dec. 13, 2016

While the national outlook is good, New Mexico may not see the increase in spending at the same level.(Photo: File)

LAS CRUCES - We have officially arrived at the time of year when merchants across the country pin their hopes on holiday shoppers with loose purse strings.

While the masses engage in the commercial marathon of malls, local shops, online shopping and treating themselves to dinner out with family and friends, it's the jingle of the cash register that has managers — from national chains to your local shopkeeper — checking their lists. This may be a year in which they get a little more than coal in their stockings, according to the accounting elves at the National Retail Federation.

The NRF, which tracks consumer spending during the holiday shopping season, expects to see holiday retail sales rise more than 3.6 percent, to $655.8 billion, excluding gas and restaurants. That means this year's November and December shopping would outpace last year's 3.2 percent increase and edge out the seven-year average of 3.4 percent since the economy began to recover in 2009.

In addition, increased spending on dining out becomes significant as well. The National Restaurant Association projects the industry to have about $783 billion in sales by the end of 2016. Online sales are forecast to increase between 7 and 10 percent over last year, to as much as $117 billion.

Retailers are also expected to hire between 640,000 and 690,000 seasonal workers this holiday season, in line with last year’s 675,300 holiday positions, according to the NRF.

While the national outlook is good, New Mexico may not see the increase in spending at the same level, said New Mexico State Economist James Peach.

"What I'm looking at is 3.7 (percent increase). That, compared to last year, is 4.1 percent growth," he said. "It's healthy. If NRF is correct, 3.7 percent national is not bad at all."

Some market watchers noted sales were down in October and September, possibly due to election uncertainty, Peach said.

Employment growth is strong across most of the nation, with 161,000 jobs added in October for an unemployment rate of 4.9 percent nationally. An average of 171,000 jobs were added monthly when averaged over the year, according to Peach.

"That puts income in people's pockets and they tend to spend it," he said. "The bad news is, in New Mexico our employment numbers are not growing. You can't translate national employment or income growth into what might happen in New Mexico."

Peach said it's unlikely anyone can predict how New Mexicans will actually shop this season, but points to gross receipts data that fiscal year 2016 was down "a lot" as cause for caution.

"In New Mexico, a key factor, of course, is the price of oil," he said. "And we are down over 50 percent than 2014. That hurts, especially in Eddy and Lea counties, Chavez County and that part of the state."

In the end, it comes down to those who hold the purse strings.

"Consumers are a strange lot," Peach said. "Some people may say 'Well, we've had a rough couple of years. Let's go out and have some fun this time.' Who knows?"